@releasethekraken_1 wrote:
@twnpopcards wrote:
@hpenryessentials
@hpenryessentials wrote:
PayPal has always used the entire transaction for their metrics and that includes sales tax, so when you were using PayPal, you were paying essentially the same amount. It will take some time for you to see the actual differences in your selling costs but they're there.
You are correct in that Paypal did charge their processing fees on the Sales Tax all along and that is also how it is done for Brick and Mortar stores. But there is a huge difference between paying 2.96% on the Sales Tax which is the normal processing fee. However, Ebays Managed Payments charges 12.3% on the Sales Tax which is not only the 2.3% processing fee that they are currently charging Sellers for processing through Managed Payments but also the FVF on a tax that they collect and the Seller has no way to recoup except to raise their original prices to try and compensate for it. This is nothing more than another money grab by Ebay to try and show some kind of growth as Managed Payments is not yet generating the revenues they had projected it would and is taking a lot longer to roll out than they had originally told Wall Street. So until such time as those numbers are generated look for Ebay to continue to make increased revenues from Managed Payments any way possible.
Paying FVF on sales tax is not a huge difference when the processing fee drops from 2.9% to 2.35%. In fact, for sales tax less than 5.9%, the total fees are lower.
The problem with just throwing out the fact that "In fact, for sales tax less than 5.9%, the total fees are lower." is that by itself it paints a skewed and a OVERLY OPTIMISTIC picture that is extremely flawed.
And this is why.........
Currently there are 12 states that either have a) a sales tax rate of less than 5.9%, b) have no sales tax at all, or c) have state sales tax but do not currently have a Marketplace Facilitator Law on the books.
But here's the rub. Those 12 states collectively only represent approximately less than 15% of the US population.
The total population of the 9 states with a sales tax rate of 5.9% or less, or no sales tax at all, is 17,620,323 which equates to only 5.3% of the total US population
1 - Alaska (possible 1.76% Average Sales Tax) - Population 735,720
2 - Delaware (0% Sales Tax) - Population 975,033
3 - Hawaii (4.44% Average Sales Tax) - Population 1,406,430
4 - Montana (0% Sales Tax) - Population 1,074,532
5 - Maine (5.50% Average Sales Tax) - Population 1,342,097
6 - New Hampshire (0% Sales Tax) - Population 1,372,200
7 - Oregon (0% Sales Tax) - Population 4,289, 440
8 - Wisconsin (5.43% Average Sales Tax) - Population 5,852,490
9 - Wyoming (5.33% Average Sales Tax) - Population 572,381
Then there are 3 states that do have sales tax but do not currently have MFLs or Marketplace Facilitator Laws on the books. Therefore at this time no sales tax is assessed on purchases made from buyers located within 1 of these 3 states.
1 - Florida (7.08% Average Sales Tax) - Population 21,944,600
2 - Kansas (8.69% Average Sales Tax) - Population 6,169,040
3 - Missouri (8.25% Average Sales Tax) - Population 2,910,220
The total population of these 3 states currently without Marketplace Facilitator Laws, is 31,023,860 which equates to approximately 9.4% of the total US population.
So as it stands right now, based on population which is closely representative of eBay buyers, and the overall online buying population, sellers will more than likely have an 85% chance of having buyers from a state whose sales tax rate is higher that 5.9%, 85% of the time. Therefore on average, 85% of the time, seller's fees will be higher under Managed Payments.
But that percentage is going to change drastically by the end of the year because of the states of Florida, Kansas, and Missouri.
There are currently 3 states (Florida, Kansas, & Missouri) that do not have MFLs or Marketplace Facilitator Laws on the books. Therefore, eBay is not currently required to collect sales tax from buyers located within these states, and due to that fact sellers are not assessed a FVF on sales tax on purchases that are being shipped to 1 of these 3 states
All 3 of these states currently have bills within their state legislation right now which propose Marketplace Facilitator Laws be enacted.
In the case of Florida (the big one), if passed (and it will) the law would go into effect on July 1, 2021
In the case of Kansas, if passed (and it will), has yet to determine when exactly the law would go into effect.
In the case of Missouri, if passed (and it will), the law would go into effect on January 1, 2022.
After all 3 of these state's MFLs go into effect, then almost 95% of the time eBay's Managed Payments will more than likely cost sellers more due to the fact that at that point in time there will only be the 9 states left with a sales tax rate of 5.9% or less or where the state has no sales tax at all.
Unfortunately for eBay sellers those 9 states only account for about 5.3% of the total US population.
California has an average sales tax rate of 8.66% and it can get well over 10% in some jurisdictions. And California alone has a population of 39,747,267 which is 2.25 times larger than the collective population of all 9 of those states (with a sales tax rate of 5.9% or less or states where no sales tax is collected at all). And that is just 1 state!
When sellers are talking about and assessing the FVFs that are being applied to sales tax under the new Managed Payments structure, they need to take into consideration the population of each state where sales tax and therefore FVFs are being applied.
No offense to the buyers from the state of Wyoming (population 572,381) but their 5.33% sales tax rate is not going to save me that much money under eBay's new Managed Payments fee structure. Because frankly there is just not enough of them to make any sort of meaningful impact with regards to FVF savings that their state presents under eBay's new Managed Payments fee structure.
